Greek police teargas youths in 2nd week of protests

ATHENS (Reuters) – Greek police fired teargas at small groups of protesters who threw stones and firebombs in central Athens on Monday in a second week of anti-government demonstrations since a policeman shot dead a teenager.

Youths outside Athens’ main court and central police station clashed with riot police, while acts of vandalism against shops were reported in two northern cities in protests against the Dec. 6 killing of 15-year-old Alexandros Grigoropoulos. His death has triggered Greece’s worst riots in decades.

The unrest, which has caused more than 200 million euros ($270 million) worth of damage, has fed on anger over political scandals, high youth unemployment and low wages, and the impact of a global recession on Greece.

In bond markets, the spread between Greek debt and German benchmark bonds — a measure of perceived investment risk — reached its widest point in nearly a decade on Monday, at more than 2 percent. Analysts said the political crisis had compounded concerns due to the global economic downturn.

IMF Managing Director Dominique Strauss-Kahn warned there was a risk of social unrest spreading unless the global financial sector shared wealth more evenly. Copy-cat demonstrations have taken place in many European countries.

The scale of the Greek protests has tailed off sharply in recent days and Athens was peaceful on Sunday, but students and police exchanged firebombs and teargas on Monday and more rallies have been called for Thursday and Friday against education and pension reforms, privatisations and tax rises as the budget goes to parliament.

The conservative government only has a one-seat majority and trails in polls.

“It was expected this would continue for a second week,” said Kiki Toudoulidou, 37, a teacher. “If the government was handling the situation in the right way, we wouldn’t have reached this point.”

Central Athens braced for further violence later on Monday, when an anarchist group plans to march on parliament.

The tourist industry worries that more unrest will put off foreign visitors and badly hit the sector which accounts for nearly one-fifth of gross domestic product.

GOVERNMENT RESPONSE

Greek Prime Minister Costas Karamanlis’s ruling New Democracy party has denounced the riots as the work of a small group of hardcore anarchists, but at their peak early last week thousands of youths ran riot through 10 cities, wrecking hundreds of cars, banks and businesses, spooking investors.

“Even if you don’t believe that Greece could end up exiting the euro, you will not want to take on risk,” said Peter Mueller, interest rate strategist at Comerzbank in Frankfurt.

Chris Pryce, sovereign analyst for Greece at Fitch Ratings, played down the political risk to the government. He told Reuters Television he had no plans to alter Greece’s A rating.

“It will stay stable I would have thought: single A — the lowest in the euro zone — for some time to come,” he said.

Karamanlis, whose hands-off response to the riots has been criticised by Greek media, travelled to Cyprus on Monday for the funeral of former president Tassos Papadopoulos.

An opinion poll published on Sunday by Kathimerini newspaper put disapproval of the government at 68 percent, with 60 percent of those polled saying the riots were a social uprising rather than an outburst by an isolated fringe of violent protesters.

The National Confederation of Commerce estimates 565 shops were damaged in Athens, ruining the Christmas shopping period.

“There is no business. People are disappointed and angry,” said Dimitra, 61, a shop owner who declined to give her second name. “The protests will continue. They only needed an excuse.”

The policeman charged with killing Grigoropoulos has been jailed along with a colleague pending trial. More than 400 protesters have been detained during the unrest, although most of have subsequently been released without charge.